Final #5 Flashcards
What are 2 items that do not trade on the market?
Limited Partnerships and Variable Annuities
Any checks drawn on a joint account must be made out to what name?
The full name on the account (not individual names).
Note that mailing of account statements, orders can be entered, and open orders can be canceled, by any single party
For securities in a margin account to be able to transferred into the customer name and shipped to customer house, what must happen?
Securities held in margin accounts cannot be transferred and shipped unless the customer pays off the loan on the securities in order for the brokerage firm to transfer them into his name and ship them
What are the 3 primary rules related to SEC Commissioners under the Sec. Exchange Act of 1934?
- There are 5 SEC commissioners
- No more than 3 can be affiliated with one political party
- Commissioners must work full time and cannot trade on their own accounts
What are the 2 primary rules associated with an offer of rescission?
- The offer can only be made PRIOR to the institution of a lawsuit alleging a securities violation
- An offer must be made to buy back the security at the ORIGINAL purchase price and the customer must be paid interest at the legal rate in the State, less any dividend or interest income received from that security
The person who prepares the Trust Agreement is the:
Trust attorney
The amount of surety bond coverage that is typically posted by a broker-dealer for initial registration in a state is:
$10,000
An unregistered person cannot be compensated with commissions or pay based on _________.
Production. Note that “performance bonuses” are ok - bonuses are paid for simply doing a good job whereas a production bonus is based on the level of commissions and other fees that are earned
Under the Uniform Securities Act, for an agent to share in the gains and losses of a customer account, what 3 things must occur/be present?
- The customer must agree to the arrangement in writing
- The broker-dealer must agree to the arrangement in writing
- Sharing is permitted only in direct proportion to capital contributed to the account
For the recipient of a dividend, the “tax event” occurs on what day?
The date the issuer sends the check (payable date)
What day is the ex date, set by FINRA?
FINRA sets the ex dividend date for cash dividends at 1 business day prior to the Record date. Anyone who buys 2 business days or more prior to the Record date will settle on, or before, the Record date and will receive the dividend
The rate of return that considers compounding of returns of the time horizon of an investment is:
The geometric rate of return
If an agent of a broker-dealer or an investment adviser representative wishes to publish any content on the Internet, either as a website or on a blog, what must happen first?
- Agent or IAR discloses their affiliation with the the firm
- The firm must approve the content on the Internet
- The firm must authorize the distribution
- Agent or IAR must act within the scope of authority granted by the firm
A lawsuit filed alleging violations of the Uniform Securities Act survives the death of the plaintiff and/or defendant - True or False?
True.
What items are included in ANY registration statement for a security? CLUB OA
Current balance sheet and income statement
Legal opinion
Use of offering pdoceeds
Business description
Offering Terms
Accountant’s Opinion
Note that there are NO projections in a registration statement
Under the Investment Advisers Act of 1940, an SEC registration application as an investment adviser must be granted; or a proceeding must be initiated denying registration, within:
45 days
